Impact of HRM Practices On Organizational Commitment of Employees

InternationalJournalofAdvancementsinResearch&Technology,Volume2,Issue4,April2013407
ISSN22787763
Copyright2013SciResPub.

IMPACT OF HRM PRACTICES ON ORGANIZATIONAL
COMMITMENT OF EMPLOYEES
Shruti Lamba*, Nirmala Choudhary**

*Research Scholar, University School of Management, K.U.K., Email:
Lamba.shruti88@gmail.com, Mob:+917276117048
**Professor, University School of Management, K.U.K, Email: nirmalakuk@yahoo.co.in,
Mob:+919896436069

ABSTRACT

In this era of highly competitive environment, organizations in Manufacturing sector and
Service sector are trying hard to win the mind of customers by providing them value added
service and quality innovative products to remain competitive in the market. The objective of
this study is to investigate the impact of HRM practices on Organizational commitment of
Employees in various sector in India. The study revealed that how HRM practices provide an
edge to employees commitment towards an organization goal in the global competitive market.
Through study it is found that HRM practices influence the Organizational Commitment of
Employees.

Key words: HRM practices, Organizational Commitment, Employees.

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INTRODUCTION

HUMAN RESOURCE MANAGEMENT PRACTICES
Success in today's competitive market depends less on advantages associated with economies of
scale, technology, patents but are more derived from organizational human resources and high
involvement of human resource management practices ( Tahir Masood Quresh, Ayisha Akbar,
Mohammad Aslam Khan, Rauf A. Sheikh and Syed Tahir Hijazi,2010). For an organization to
be more effective it should have skillful and innovative employees to work and should also try to
retain them.
There is not a single HR Practice which a company aspires to retain its employees. There are
different HR Practices which a company combines to manage its HR system. A company should
always combine Number of Best HR Practices which they should implement for the survival
and sustainability of the organization. Best practices" in HR are subjective and transitory.
They enhance internal capabilities of an organization to deal with current or future challenges to
be faced by an organization. Good HR practices also energize people working in the
organization. The commitment and motivation built through good HR practices can lead to hard
work. The culture so built can help to create a sustainable and lasting capability of the
organization to manage itself and not only cope with the external turbulence (Aneet, 2006).
Good employees are supposed to have such characteristics as high satisfaction with their jobs,
high commitment towards the organization, high motivation to serve the public and strong
intentions to work for the organization willingly and devotedly. ( Sangmook Kim,2004).

There are different HR Practices for the organization to adopt. HR practices contribute to the
organizations bottom line, areas such as recruitment, selection, training, development and
performance appraisal which should be consistent, integrated and strategically focused. Firms
need to build long-term commitment to retain their work force.
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The researcher has taken following combination of Human Resource Practices in the study:

HRM Practices
1. Recruitment and Selection
2. Training and Development
3. Compensation and Benefits
4. Promotion and Transfers
5. Welfare activities

1. RECRUITMENT AND SELECTION- It is the process of searching for prospective
employees and stimulating and encouraging them to apply for jobs in an organization (Edwin
B. Flippo, 1980). Some organizations like public sector adopt centralized recruitment
whereas other organizations resort to decentralized system. There can be different sources of
recruitment namely internal sources like vacancies, transfers, promotions, retired and
retrenched employees, dependants and relatives of deceased and disabled employees or it can
be external sources like education and training institutions, search engines, employment
exchanges etc.
Recruitment technically precedes selection. Selection is the process of choosing the most
suitable persons out of all applicants. It is the process of matching the qualifications of
applicants with job requirements. According to Dale Yodder (1972) Selection involves Test,
Interview and Medical examination of the candidates. Referrals of candidates are also
checked for predicting their behavior and performance.

2. TRAINING AND DEVELOPMENT- Training is the process of increasing the
knowledge and skills for doing a particular job. The purpose of training is basically to bridge
the gap between job requirements and present competence of an employee. Training is aimed
at improving the behavior and performance of persons. There are different types of training
programmes like Orientation training, J ob training, Safety training, Promotional training,
Refresher training, Remedial training etc.to enhance the skills of employees.
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Executive development is a systematic process of learning and growth by which managerial
personnel gain and apply knowledge, skills, attitutes and insights to manage the work in their
organizations efficiently and effectively. It is necessary for the managerial personnel so as to
cope up with the size and complexity of organization, technological changes. It is also
necessary to recognize their social and public responsibilities etc.

3. COMPENSATION- Wage, Salaries and other forms of employees compensation
constitute a very large component of operating costs. No organization can expect to attract
and retain qualified and motivated employees unless it pays them fair compensation.
Employee compensation can be classified into two categories- Basic or Primary
compensation and Supplementary compensation. Basic pay refers pay in the form of wages
and salaries. It is fixed and non-incentive payment. Supplementary compensation consists of
incentive and variable payments, based on either individual output or output of group as a
whole.

4. PROMOTIONS AND TRANSFERS- Promotion refers to advancement of an employee
to a higher post carrying greater responsibilities, higher status and better salary. Promotion
can be made on different criterias like seniority, merit etc. They help to recognize an
employees performance and commitment. It also helps to boost the morale and also help to
develop a competitive spirit among employees for acquiring knowledge and skills.
Transfers refer to a horizontal or lateral movement of an employee from one job to another in
the same organization without any significant change in status and pay. There are different
purposes of transfers like to meet both organizational and employee needs, to make employee
more versatile, to adjust workforce, to provide relief etc.
6. WELFARE SCHEMES- It means anything done for intellectual physical, moral and
economic betterment of employees by employers, Govt. or other agencies. These welfare
services may be classified into Intramural and Extramural. In Intramural services are
provided within establishment and in Extramural services are provided outside the
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establishment. They help to increase employees productivity, morale, industrial relation,
goodwill etc.

Employees operational performance depends on four intervening factors: Competence,
Teamwork, Organizational Commitment and Customer Orientation. Individual performance and
organizational effectiveness cannot be achieved without organizational commitment, i.e.
readiness to exert considerable effort on behalf of the organization (Becker, 1960; Porter et al.,
1974; Mowday et al., 1979; Allen and Meyer, 1996; Mowday, 1998; Beck and Wilson, 2000).
Good HRM Practices lead to high organizational commitment and different researches in USA
and now Britain justify them.( Mick Marchington and Adrian Wilkinson,2005). Thus many
researches show that organizational commitment of employees plays a very important role in the
increased efficiency of employees and organization.

In an individual-level analysis, Paul and Anantharamans (2004) study of software professionals
showed that HRM practices had a significant positive relationship with organizational
commitment. HRM systems have also been found to relate to commitment in samples of
frontline employees from car rental, retail, and hospitality organizations in South America
(Browning, 2006). Payne and Huffman (2005) found in a longitudinal study that organizational
commitment mediated the relationship between mentoring, an HRM practice in the organization
studied, and employee turnover over time. In a unit-level study, Wright, Gardner, & Moynihan
(2003) found a positive relationship between HRM practices and organizational commitment in a
study of 50 business units from a large food service corporation.

Recent research has found that an employees career commitment is a moderator between the
perception of company policies and practices and organizational commitment (Fred Luthans,
2002).

Thus, above discussed HR Systems and Researches, shows a significant relationship between
HRM Practices and Organizational Commitment.

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ORGANIZATIONAL COMMITMENT
Organizational commitment is the individual's psychological attachment to the organization.
Higher is the rate of commitment, more is the attachment towards the organization. Commitment
represents something beyond mere passive loyalty to an organization. It involves an active
relationship with the organization, such that individuals are willing to give something of them in
order to contribute to the organizations well-being.
It can be characterized by at least three factors: (a) a strong belief in, and acceptance of, the
organizations goals and values; (b) a willingness to exert considerable effort on behalf of the
organization; and (c) a strong desire to maintain membership in the organization (Porter et al.)

Commitment is a sort of bond between employee and the organization. The Organizational
Commitment attitude is determined by a number of personal (age, tenure in the organization, and
dispositions such as positive or negative affectivity, or internal or external control attributions)
and organizational (the job design and the leadership style of ones supervisor) variables. Even
non-organizational factors, such as the availability of alternatives after making the initial choice
to join an organization, will affect subsequent commitment (Fred Luthans, 2002)

Model of commitment
According to Meyer and Allen's (1990) three-component model of commitment and (Removed),
prior research indicated that there are three "mind sets" which can characterize an employee's
commitment to the organization:
Affective Commitment: AC is defined as the employee's positive emotional attachment to
the organization. An employee who is affectively committed strongly identifies with the
goals of the organization and desires to remain a part of the organization. This employee
commits to the organization because he/she "wants to".
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Continuance Commitment: The individual commits to the organization because he/she
perceives high costs of losing organizational membership, including economic costs
(such as pension accruals) and social costs (friendship ties with co-workers) that would
be incurred. The employee remains a member of the organization because he/she "has
to".
Normative Commitment: The individual commits to and remains with an organization
because of feelings of obligation. These feelings may derive from many sources. For
example, the organization may have invested resources in training an employee who then
feels a 'moral' obligation to put forth effort on the job and stay with the organization to
'repay the debt.' It may also reflect an internalized norm, developed before the person
joins the organization through family or other socialization processes, that one should be
loyal to one's organization. The employee stays with the organization because he/she
"ought to".
However, affective commitment is more important to organizational performance than
continuance or normative commitment.
Organizational Commitment is a sort of strong magnetic force which binds employees with
their willingness to remain attached to its organization. If employees are committed towards
their organization they will perform their job well and the ultimately performance of the
organization will be better.
Organizational commitment of employees can also be increased by committing the values of
people first by giving them proper compensation, promotion, training, fringe benefits etc. Also
by communicating and clarifying the mission, vision and objectives of the organization,
comprehensive grievance procedure provide for extensive two way communication, support
employee development, security etc.(Fred Luthans,2002).All these practices highlights the
attractive features of the job for the career development of employees, which is reciprocated by
commitment (Robert J . Vans,2006). Organizationally committed employees will usually have
good attendance records, demonstrate a willing adherence to company policies, and have lower
turnover rates which is directly related to employees retention.
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HRM Practices

SelectionRER
Compensation Commitment Retention

RESEARCH

Figure-1

RESEARCH METHODOLOGY
The idea of writing this paper is to study, analyze and examine the impact of HRM Practices on
Organizational Commitment of Employees. So, this research papers aims to develop a research
model which can justify this paper and find out the possible ways of influential role of HRM
practices on Organizational Commitment. Hence, we have used Secondary data for our research.
The source of data was secondary data which has been collected while studying various research
paper and result will be analysed with the help of literature reviews.

LITERATURE REVIEW

Mohd H. R. J oarder et al (2012) studied intervening effects of Affective commitment on the
relationship between certain human resource practices and turnover intention in the context of
private university in Bangladesh and reveal that HRM Practices did have significant impact on
affective commitment except job autonomy. S.G.A. Smeenk, et al in 2006 examined the factors
that affect organizational commitment among Dutch university employees two faculties with
different academic identities (separatist versus hegemonist). The results empirically give an
argument which tells there cant be same HRM policies for two different set of identities.
Recruitment&Selection
Training&Development
Compensation
Promotion&Transfer
WelfareSchemes
Commitment Retentionof
Employees
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Affective commitment mediates the proposed relationship between HRM practices and turnover
intention among the private university faculty members. HRM Practices mainly J ob Security,
Compensation, J ob Autonomy, Working Condition, Training & Development, Supervisory
Support were conducted and found that compensation, supervisory support and job security
were highly significant and negatively related to turnover intention (Mohd H. R. J oarder in 2011)

Komal Khalid Bhatti et al (2011) has shown that direct participation has effect on Organization
commitment has significant and positive impact among Banking Sector Employees of U.S.A and
Pakistan. Furthermore, research on the Impact of Human Resource Management Practices on
Organizational Commitment in the Banking Sector was conducted across permanent, full-time,
and part-time employees (managers and non-managers) of five large private banks in Kuwait.
The HRM practices were measured on a scale for recognition, competence development, fair
rewards, and information sharing and study showed that competence development, fair rewards
has impact of HRM practices on Organizational commitment and other factors doesnt show an
impact on organizational commitment (Nicole Renee Baptiste, 2008).

A K Paul in 2004 has made a research on Influence of HRM practices on organizational
commitment among software Professionals in India which revealed that HRM practices such as
employee-friendly work environment, career development, development oriented appraisal, and
comprehensive training show a significant positive relationship with organizational commitment.
Among Army man it was found that higher levels of Affective Commitment and Normative
Commitment predicted higher leadership evaluations, whereas higher levels of Continuance
Commitment were associated with lower leadership evaluations
(Angela in 2003).
Employees J ob satisfaction and commitment can enhance the voluntary turnover, motivation and
job performance towards Organization except supervisors' ratings of job performance among
managerial employees. (T A DeCotiis, 1987).
Thomas Tellefsen, 2005 analysed the potential for business service customers to form separate
bonds of commitment with the service firm and the service representative. Findings suggest that
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personal and Organizational Commitment did influence the degree of relational exchange
between the customer and the service firm.
The study examined by J acqueline A-M Coyle-Shapiro in 2006 shows that Organizational and
client commitment among contracted employees in four large contracting firm in U.K. It was
found that client organizational support and attractiveness of the client organization were
positive to employees affective commitment.
The correlation between employees' justice perceptions, perceived organizational support,
organizational commitment and intention to leave conducted on practicing solicitors in Law
firms in Hong Kong. And found that procedural and distributive justice contributed to the
development of organizational commitment and affect the intention to leave while organizational
commitment negatively related to intention to leave. (Raymond Loi et al, 2006).
Christopher M Lowery et al, 2002 found that Blue collar workers in United States were more
concerned on satisfaction with coworkers, satisfaction with supervision, and satisfaction with
pay, but less concerned about satisfaction with opportunities for advancement, satisfaction with
the work itself and organizational commitment.
Among retail salesperson, rewards play a very important role in increasing the commitment
level. Also friendly environment, participatory approach decreases role stress and increases
career commitment (William R Darden, et al 1989).
In Canadian based organizations, it was found that development-oriented, stability-oriented, and
reward-oriented human resource management practices affects the employee commitment (Ian R
Gellatly et al in 2009). The research conducted by Michel Tremblay et al in 2010 examined the
role of linking HRM practices, organizational commitment and performance of Employees in
Canadian Hospital. The findings revealed that relationship between HRM practices and
performance HRM practices can stimulate greater in-role and extra-role. Supportive HRM
policies also assist to enhance org commitment.
J ohn P Meyer in 2000 focuses on a study which examined the mechanisms involved in observed
relations between HRM practices and employee commitment in Canada. The findings revealed
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the positive evidence of relations between HRM practices and commitment and shows that
employee oriented HRM policies enhance the commitment level towards an Organization.
The research conducted by Olivier Herrbach in 2009 designed the relations among perceived
HRM practices, organizational commitment, and voluntary early retirement in France and found
that training opportunities is most favorable factor which enhances the higher affective and high-
sacrifice commitment and reduced voluntary early retirement. It was also found that flexible
working conditions and promotion of older employees to new role such as mentor or coach did
not have positive effects on Organizational Commitment. Steven M Sommer in1996 found that
as the organization size increased, commitment level decreased but the commitment level in
Korean firms. Among Mexican Employees in U.S. firms, job satisfaction, participative decision
making, and age were the factors towards achieving organizational commitment (J Kline
Harrison,1998)
Asta Savaneviciene et al in shows that HRM practices has major impact on organizational
commitment, while engagement-enhancing HRM practices stimulate job satisfaction which in
turn improve affective commitment. However Career development opportunities have a positive
effect on the Affective commitment of employees (Tek-Yew Lew, 2011)

Promotion, satisfaction, job characteristics, communication, leadership satisfaction, job
satisfaction, extrinsic exchange, intrinsic exchange, extrinsic rewards, and intrinsic rewards are
positively and significantly related to commitment among employees of organizations. Contrary
to expectations, pay satisfaction did not correlate significantly with commitment among
employees working in hospitals (Brian S Young, Stephen Worchel, David J Woehr, 1998)
Also, the study conducted by Taly Dvir, Naama Kass, Boas Shamir in 2004 on relationships of
vision and Organizational commitment among high-tech employees, to the emotion-focused
affective commitment versus the cognition-focused continuance commitment to the organization
showed that vision formulation, content of social-oriented values, and assimilation were
positively related to Affective Commitment to the organization, and unrelated to Continuance
Commitment.

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RESEARCH FINDINGS
The purpose of the study was to determine the extent of impact of HRM practices on
Organizational commitment can be explained by differences in Training & development,
Compensation and Welfare HRM Practices.
The study found out that HRM practices such as Compensation, Training & development and
Employee participation play a significant role on Organization Commitment in Banking sector.
While it is found that HRM practices such as Compensation, J ob security and J ob performance
has significant importance on Affective commitment but same HRM policies cannot be set for
two different set of identities among private Universities across globe. In academics sector,
HRM practices viz. career development and job satisfaction has significant impact on
Organization Commitment. In Hospital industry, supportive reward oriented HRM Practices
increases employee commitment towards Organization. In contrast to this, Employees from IT
software industry are influenced by HRM policies such as Training, Career development and
friendly work environment. In high-tech industries, affective commitment has pivotal role.
However, the research on blue collar employees in manufacturing industries found that HRM
policies such as job satisfaction and pay satisfaction has significant role in achieving
organizational commitment. On the other hand, research conducted on Law firms suggested that
Employee welfare and process oriented HRM policies might be the path in achieving better
organizational commitment.

CONCLUSION

The conclusion builds on previous researches shows that HRM practices such as Training &
development, compensation and welfare activities has significant effect on Organizational
commitment and are associated with superior organizational performance. Study depicts the
result from the various sector viz. Banking, Academics, IT software industry, high tech
Innovation Industries, Manufacturing Industries etc. However, it is very difficult to achieve
customer-centric strategic management without first achieving employee satisfaction. Also when
employees are satisfied, it results to customer satisfaction which ultimately increases the
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profitability and goodwill of the firm. Therefore, it is proved in the study, HRM practices have
significant impact on Organizational commitment and which is further related to Retention of
knowledgeable and skilled Employees.

RECOMMENDATIONS

It was found that HRM practices have a significant role on Organizational Commitment of
Employees but there need to be improvement in the area like Training & Development,
Compensation and Employee welfare. To avoid such gaps, Organization must have to take care
of Employees Training & Development, Compensation and Welfare Schemes. Apparently, it has
to be on regular interval which not only improve & enhance their skills but increase the
productivity of the organization. In an era of cut-throat competition, it is also important to retain
resources while offering other benefits like welfare, promotion, skill development, participative
approach, two way communications etc.

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